Important Computation Problems
Having the ability to process a large number of transactions has become the key focus area for many blockchain implementations.
In the following talk Vitalik talks about 4 categories problems that most blockchains have to handle.
- Privacy – a public ledger verifies data, but many nodes also access the data. This compromises the privacy of the user. Many solutions such as a mixer, etc… are being worked on at this point in time.
- Consensus safety – the possibility of reducing the power consumed. (according to some estimates proof of work consumes more power than 1/2 the national power consumption of several small countries). Additionally achieving consensus has problems that arise from privacy violation, etc.
- Smart Contract bugs – loss of ethereum every year because of bugs in existing code bases of smart contracts. Therefore the proposal of Formal Verification (possibly automated) mechanism could reduce instances of these problems.
Scalability – the most interesting and complex problem to solve
Scalability – support for a large number of transactions. Many off-chain solutions similar to the lightning network, Raiden, plasma are possible- but their throughput is limited because of the main blockchain’s ability to handle attacks, etc… Therefore, the current proposed solution is to use “sharding” as a mechanism to scale the main chain solution. Sharding has its origins in large scale distributed databases and has been used to reduce query times from large databases, by partitioning data based on rules.
The following talk by Vitalik discusses the basics of the sharding approach for the Ethereum Blockchain. This approach suggested, is a hybrid approach wherein some part of the validation is done off-chain. The talk discusses the ability to target VISA scale validation for smart – contracts (not just pay and receive).